TaxTMI 
TaxTMI 
TaxTMI 
2018 (5) TMI 1804
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....tion 143(3) of the Act vide order dated 30.12.2009 whereas substantive additions were made in the hands of the assessee's father, Dr. Yogiraj Sharma. When the quantum issue came up before the Tribunal, protective addition in the hands of the assessee was confirmed as substantive addition. Subsequently, penalty proceedings were initiated u/s 271(1)(c) of the Act and notices u/s 274 r.w.s. 271(1)(c) of the Act of the Act dated 16.6.2015 were issued alleging that "has concealed the particulars of your income or has furnished inaccurate particulars of such income". The Assessing Officer on the strength of the order of the Tribunal confirmed the substantive addition in the hands of the assessee and levied penalty u/s 271(1)(c) of the Act of Rs. 60,000/- for the assessment year 2002-03, Rs. 2,50,000/- for the assessment year 2004-05, Rs. 8,00,000/- for the assessment year 2005-06, Rs. 21,00,000/- for the assessment year 2006-07 and Rs. 11,50,000/- for the assessment year 2007-08 and Rs. 1,55,000/- for the assessment year 2008-09. Aggrieved, the assessee preferred appeal before the learned Commissioner of Income Tax (Appeals) but could not succeed. Now the assessee is in appeal before the....
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....P- 152 - 171) (165, 166, 168) [Vol.-I] Apart from the above, the learned counsel for the assessee submitted that the additions were made on protective basis. When the notices were issued for levying the penalty, the Assessing Officer was not clear as to whether it has to be levied for concealing the particulars of income or furnishing of inaccurate particulars of income and even in the penalty order also, the Assessing Officer is not clear about the limb under which the penalty is to be levied. 6. On the other hand, the learned DR vehemently argued submitting that the coordinate Bench has already held that the addition in the hands of the assessee is on substantive basis. Therefore, the penalty levied is justified. However, the ld. DR could not contradict the submissions of the assessee with regard to legality of the notice issued u/s 274 r.w.s. 271(1)(c) of the Act. 7. We have considered the rival contentions and perused the record placed before us. The common issue raised in this Bunch of appeal is levying penalty u/s 271(1)(c) of the Act. In the case of the assessee search u/s 132 of the Act was carried out and substantive additions were made in the hands of the assessee's f....
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....e for which penalty has been levied. In these facts, whether the Assessing Officer was justified in levying the penalty u/s 271(1)(c) of the Act we find that the coordinate Bench of Jaipur in the case of Narayana Heights & Towers; ITA No. 1033/JP/2016 order dated 20.2.2017 adjudicated the very same issue and decided the same in favour of the assessee following the judgment of the Hon'ble Karnataka High Court in the caseof CIT vs. Manjunath Cotton & Ginning Factory; 359 ITR 565 by observing as under :- "3.2. We have heard the rival contention, perused the material available on record and gone through the orders of the authorities below. For the sake of clarity the relevant contents of the Assessment Order are reproduced as under: "Penalty u/s 271(1)(c) is separately as assessee has concealed the income." Relevant contents of the Penalty Order are reproduced as under:- "As the assessee had not filed any appeal against order of the AO and it appears that the assessee is satisfied with the order passed by the AO. Therefore, it appears that the assessee has nothing to say and has no objection regarding imposing the penalty u/s 271(1)(c) of I.T. Act, 1961. Therefore, I impose a pen....
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....culars of income." Therefore, there is no specific charge by the Assessing Officer. Further, it is noted that the Assessing Officer in penalty order (as noted hereinabove) has proceeded on the basis of the assumption that the assessee is satisfied with the assessment order. Therefore, it appears that the assessee has nothing to say and has no objection regarding the imposing of the penalty under section 271(1)(c) of the Act. In our considered view, the assessing officer was not justified in imposing the penalty on this basis, the action of the assessing officer is contrary to the provision of law. The ld. CIT (A) without considering the binding precedents proceeded to hold that the penalty order can not be invalidated on account of any mistake or affect or omission if anywhere in view of the provision of section 292B of the Act. This finding of the Ld. CIT (A) is contrary to the judgment of the Hon'ble Karnataka High Court rendered in the case of CIT and Another Vs. Manjunatha Cotton and Ginning Factory,359 ITR 565(Kar.) (supra). The Hon'ble Karnataka High Court has held as under:- " 63. In the light of what is stated above, what emerges is as under : (a) Penalty under section 271(....
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.... The direction referred to in Explanation 1(B) to section 271 of the Act should be clear and without any ambiguity. (o) If the Assessing Officer has not recorded any satisfaction or has not issued any direction to initiate penalty proceedings, in appeal, if the appellate authority records satisfaction, then the penalty proceedings have to be initiated by the appellate authority and not the assessing authority. Notice under section 274 of the Act should specifically state the grounds mentioned in section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income (q) Sending printed form where all the grounds mentioned in section 271 are mentioned would not satisfy the requirement of law. (r) The assessee should know the grounds which he has to meet spe cifically. Otherwise, the principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee. (s) Taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law. (t) The penalty proceedings are distinct from the assessment pro ceedings. The proceedings for imposition of penalty though ema....